CAPE TOWN (Reuters) – South Africa has selected two local consortia as the preferred bidders to develop the first privately-built coal-fired plants in Africa’s most industrialised country, the energy minister said on Monday.
South Africa is in a race to boost electricity supply, and avoid power cuts that have in the past hurt business and eroded its appeal as an investment destination.
The Thabametsi and Khanyisa consortia will add more than 850 megawatts (MW) of coal-fired production to the national grid in a country which has huge untapped coal resources.
The projects had the backing of foreign developers from Korea, Japan, Saudi Arabia and the South African banking sector.
South Africa, which generates about 42,000 MW of electricity, is aiming to diversify its energy mix to include gas, wind and solar power.
“Khanyisa (is) set to begin commercial operation in December 2020, followed closely by Thabametsi in March 2021,” Tina Joematt-Petterson told a media briefing in Cape Town.
“While South Africa’s energy build plan still incorporates the development of fossil fuel assets in the foreseeable future, we are committed to transition to a low-carbon economy.”
She said the second round of bids to develop coal power plants was being reviewed to consider the inclusion of clean coal technologies, as the world commits to reduce harmful emissions driving climate change.
The government has previously said it is also seeking alternatives in the gas, renewable and nuclear energy to help stem electricity shortfalls.
Khanyisa, which will use discarded coal from dumps to fuel its power plant in Mpumalanga, counts Saudi Arabia’s ACWA Power, General Electric and local investment firm Thebe Investments, which as a 15 percent stake, as its backers.
The Thabametsi consortium, which will develop a new mine in northern Limpopo province, is backed by Japan’s Marubeni Corporation, which holds a 24.5 pct stake, and Korea’s Kepco with a similar stake.
(Additional reporting by TJ Strydom in Johannesburg; Editing by James Macharia)